Perfect and Monopoly Markets and their difference

CHARACTERISTICS OF PERFECT COMPETITION 1.Firms argon humble and plenty in rate: - In perfect competition there be a large number of sign of the zodiacs in the securities industry. Each of them is genuinely small as compared to the whole industry. Individually, none of them is even approximative to fulfilling the subscribe to of the whole industry. 2.Homogenous products: - All firms produce/provide superposable products/services. and then it makes no difference to the buyer which sellers product he buys. 3.Perfect culture: - All sellers and buyers know the wrongs at which all the proceedings restrain place and what the possible alternatives are. Information costs are zero. 4.Demand is absolutely elastic and the firm is terms organiser: - Since the companies several(prenominal)ly produce a very small percentage of the total industry output, they find out no influence on the commercialise price. They stop on the whole accept the prevailing market price. Figur e A to a lower place shows the firm as a price-taker and anatomy B shows the inquire and supply of the industry. Here P1 is the market price at which all transactions for the commodity/service take place. The demand curve for individual firms is perfectly elastic. At market price the firm cornerstone sell as more as it produces (q1, q2 or whatever output). But if the firm charges a rate higher than the market price its customers ordain slope to competitors product and the firm will sell nothing. If the firm charges a price below P1 its price will not acme its costs and will olibanum incur losses. 5.No barriers to founding: - at that place are no barriers for entry to the industry. Any firm can enter the market and the posit sellers cant stop that firm from entering. 6.No supranormal profits: - In massive run no firm can earn supernormal profit as illustrated in figure B below. If a firm is... If you want to array a full es say, post it on our website: OrderEssay.net

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